Tuesdays are EFCA Update Days: Update!

This morning I blogged about how there really hasn’t been much noise about EFCA recently, and just a few hours later I’m compelled to draft this second EFCA Update update.  Arlen Specter, the Republican Senator from Pennsylvania who voted in favor of EFCA last time but recently said he would vote against it and thus it wouldn’t have enough support to pass, just changed sides and is going to run for re-election as a Democrat.  What does this mean to EFCA?  Plenty.  It means Specter will vote for EFCA, if EFCA is taken up this term.  Specter, who had been losing by great margins to challenger Toomey for the Republican bid for the Senate election, will now garner all of the organized labor support – and we’ve seen how organized labor, i.e. unions, can put whomever they want in elected positions.  So is EFCA still dead?  Not at all.  With Democrat Al Franken from Minnesota being recently (finally) confirmed the winner against Coleman and now Specter supporting EFCA, the Employee Free Choice Act just got a lot more scarier for companies.

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Save Our Secret Ballot Approved for Voting in Utah

The proposed constitutional amendment to the Utah Constitution to mandate secret ballot elections in union organizing drives will be voted on by the people of Utah in November 2010.  Utah is the first of the SOS (Save Our Secret ballot) states to approve the issue for a vote.  Many people (including myself) still have doubts that a state constitutional amendment would trump a federal law like the Employee Free Choice Act, but I remain hopeful that it can withstand the certain United State Supreme Court scrutiny that it will receive.  On another point, the vote in November 2010 will happen long after Congress decides which version of EFCA it will pass.

In other SOS news, the SOS Chairman, Rep. Ernest Istook responded to Teamster International President, Jimmy Hoffa’s ridiculous question of “since when is the secret ballot a basic tenet of democracy?”  Rep. Istook responded with the following:

“Mr. Hoffa’s statement is the epitome of arrogance and willful ignorance.  The secret ballot has been a basic tenet of democracy since its earliest beginnings in Greece.  Skipping ahead a few millennia, modern democracy has relied on secret ballots to ensure that the voting process is untainted by coercion and intimidation, something I think he may be familiar with.  He should ask those Democratic sponsors in the House and Senate if they enjoyed secret ballots in their leadership elections, and he also should ask Rep. George Miller why he felt it necessary to ask the Mexican government to protect secret ballots for their workers.

“SOS Ballot has been conducting a number polls with Wilson Research Strategies on the secret ballot in states where we are launching campaigns, and we have found that this issue enjoys enormous public support, including 90% support in union households.  Mr. Hoffa needs to reacquaint himself with the rank and file Teamsters whose dues pay his salary before he makes another arrogant statement.  Its clear that the union boss agenda is to oppose secret ballots throughout our society.  We cannot let them get their anti-democracy foot in the door because they might never stop.  Today they attack the secret ballot rights of their own members; tomorrow it’s the rest of us.  We saw this before our recent victory in Utah, when the UT AFL-CIO leadership referred to the secret ballot process as anti-democratic.”

UPS Workers Cry Union Intimidation

Here is just one situation that sheds light on the intimidation and harassment that employees endure during card check organization drives – the same card check drives that are a part of the Employee Free Choice Act.

National Right to Work Foundation attorneys filed unfair labor practice charges against Teamsters Local 776 for initiating a coercive organizing drive to unionize a UPS Freight facility. 

Here’s the legalese of the situation.  Initially, the workers rejected the union through a secret ballot election.  After the union was rejected by the employees, the Teamsters again tried to organize them through a “card check” organizing drive.  The Teamsters claimed they had a majority of the employees sign a card and presented those cards to management and demanded that UPS recognize the union as the bargaining representatives for the employees.  The employees immediately tried to decertify the union through an election, but the Board ruled that only one election could take place per year.

Under the Dana/Metadyne decision, employees have the right todemand a secret ballot election immediately following unionization via card check organizing as a way to counteract the employee intimidation and harassment at the hands of aggressive union operatives that frequently occurs during card check campaigns.  But, the NLRB said that only one secret ballot election could take place in any given bargaining unit during a 12-month period.  Therefore, these UPS workers were denied the opportunity to vote out the union.

This lawsuit has major implications across a wide range of labor laws, and I will keep everyone on top of the decisions as they are released.  Thank you NRTW for this update.

NLRB Proves No Need for EFCA

In May 2007, 400 card dealers at the Trump Marina Hotel and Casino in Atlantic City voted on whether to join the UAW and the company won the election.  I know, you’re thinking the UAW?  Well, this shows just how desperate unions are that they now go outside of their historical membership just to get anyone signed up who will pay them monthly union dues.  And the weak United Auto Workers target casino workers.  But I digress.

After the company won the election, the NLRB ordered a new election because it determined that threats, intimidation, and other actions by the Trump Marina violated federal labor law.  The hotel and casino was also ordered to make up the pay and benefits difference that suspended dealers missed and post the famous notice that the employer violated federal labor law.

Interestingly, Unions have used this victory to advertise the need for EFCA.  I, however, see it differently.  To me, this is proof that the current National Labor Relations Act, as interpreted by the Board, works.  It appears that Trump Marina violated labor laws and was ordered to remedy its wrongdoing.  The employees were repaid money that was due to them.  The bargaining unit got to vote again for representation. 

Employees of a Massachusetts Nursing Home also won the right to an election after the Boston Board determined that the employer violated labor laws.  Hearings were held to determine whether certain employees were supervisors and thus unable to be members in the bargaining unit, as well as to determine if the employer threatened layoffs, intimidated employees, and held improper meetings with employees.  The Board found that all of those things happened and ordered an election.  Again, the Nursing Home was ordered to remedy its wrongdoing.

 These cases prove management’s point that the laws work and there is no need for the Employee Free Choice Act.

Tuesdays are EFCA Update Days

I’ll start off with a whopper today:  Both the Communist Party USA and the Democratic Socialists of America are strong supporters of EFCA.  After thinking about it, we shouldn’t be surprised, but still, it’s discomforting to see it in black and white.

Mickey Kaus, famed blogger on Slate.com, Harvard Law School Grad, and son of former Democratic California Supreme Court Justice, opined that card check is worse then originally thought.  According to Kaus, “The arbitration parts of the card check bill are so vaguely drawn that nobody knows who the arbitrators will be.  The job appears to be delegated entirely to the Federal Mediation [and Conciliation] Service.  The FM[C]S might decide to use its own employees.  It might decide to use arbitrators from the private sector selected along more traditional lines…. Since thousands of arbitrators might quickly be needed for the expected explosion of mandatory arbitration, it’s unlikely they would all be newly hired GS-12s.”  Kaus continues, “The bill would have the effect of freezing in place hierarchies and job categories both across industries and withing individual firms.  You want to start an innovative job structure that, say, collapses six gradations of pay and authority into one?  You think workers will be happier and more productive if they’re delegated authority in this more non-hierarchical arrangement?  Sorry-if the union objects, then the arbitrator is likely to uphold the old regime on the grounds that that’s the way it’s always been done (and the way everyone else does it).  A recipe for rigor mortis!”

According to economist Anne Layne-Farrar, who studied the card check system in Canada, EFCA would result in 600,000 lost jobs following every 3% gain in union membership.  With this statistic, Ms. Layne-Farrar agrees with me that EFCA will make it harder for the unemployed to find jobs.  Binding arbitration will erase the union’s desire to bargain for a contract, but rather, the union’s unreasonable demands will be the starting point for the arbitrator.  Since FMCS (i.e. the government) will likely be the arbitrators and will impose wage and benefit levels for a 2-year period regardless of the economic consequences, a neo-Nixonesque government wage and price controls on private companies is not too far away.

Another academic found that unionized companies suffer not only lower profits but lower investment in physical and intangible capital and slower growth.  According to economic  Professor Barry Hirsch of Georgia State University, unionized firms tend to lose market share to nonunionized firms, whether foreign or domestic.  Furthermore, companies can survive unionization as long as every other competitor faces the same "tax" or if markets are notcompetitive at all.  “This is why government is the only area where unionization has been growing.”

Following up on Prof. Hirsch’s analysis that unionization only works if it’s the only game in town, Professor Gary Chiason, professor of industrial relations at Clark University in Massachusetts, speculated that if EFCA passed, unions would focus on organizing low-unionization states, i.e. right to work states, making those states less attractive to businesses.  Accordingly, “it’s in Michigan’s interest that Alabama become more unionized.”  Conversely, the Mackinac Center for Public Policy believes that EFCA would likely strengthen unions in Michigan more than other states.  According to the Mackinac, EFCA is bound to lead to the establishment of unions in workplaces where union support is weaker and weaker union support in the workplace means more union opponents who would probably opt out of joining the union and paying union dues, an option that is available in right to work states but not Michigan.  for unions, there will be a strong incentive to focus on states like Michigan where they can be assured of receiving dues from all workers, even if support in the workplace is weak.  “Secondly, because card check is vulnerable to abuse, unions will be tempted to resort to intimidation to secure signed authorization cards.  Intimidation is both easier to engage in and more tempting when one has the advantage of numbers.  Intimidation tactics are also harder to resist when one cannot be sure that the powers that be will protect you.  Michigan, with its sizable number of labor officials and politically entrenched unions, is prime territory for rough recruiting methods.”  I tend to agree with the Mackinac analysis.  How about you?

The Chambers of Commerce in Right-to-Work States agree with Chaison (and not Mackinac).  Specifically, they have 181 Chambers in right to work states have banded together to urge Congress not to pass EFCA.  According to this group, “While some have suggested that businesses in right-to-work states would not be significantly affected by EFCA, nothing could be further from the truth…  Even though workers in right-to-work states do have the right to refuse to pay union dues, if the workplace is organized, they must give up their right to deal directly with their employer.  Likewise, employers would be forced to accept arbitration agreements that may impose conditions inconsistent with established business models and impede the ability to compete.”

I started this post with reminding us all that EFCA is favorable to communists and socialists, so I’ll end it with a little levity.  Last week the AFL-CIO claimed that “Union members aren’t the only ones supporting the Employee Free Choice Act.  This week in Wisconsin, Milwaukee-area business owners got together to talk about why they support EFCA.”  The AFL-CIO’s blog hypertexted “Milwaukee-area business owners,” just like how I hypertext words in this blog that you can click on for more information.  So I clicked on those words on the union’s website and was directed to the below picture.  Correct me if I’m mistaken, but there’s 7 people on a panel and only 1 person in the audience!  So much for that non-union support! 🙂

WI: Business Panel by aflcio2008.

Why EFCA was Introduced Now

We all know that EFCA was introduced yesterday, and since its introduction, I have fielded dozens of questions of why now and why in both the Senate and House.  And although I don’t have the magic answer – only the co-sponsors of the bill have that – I do have an understanding of why now is the right time for this bill to be introduced in the manner that it was.

In 2007 the Employee Free Choice Act passed the House of Representatives with all but two Democrats voting in favor of it.  For a myriad of reasons, Democrats aren’t supporting it down partisan lines this time around.  In fact, the Blue Dog Caucus, a group of moderate/conservative Democrats in the House are beginning to vocalize their displeasure with the bill. 

In early February, Marion Berry (D-AK) told the Arkansas State Chamber of Commerce that he thought EFCA was a piece of junk and he only voted for it because he knew President Bush would veto it.  Rep. Berry is not alone in his thinking.  Both Senator’s from Berry’s state of Arkansas, Blanche Lincoln and Mark Pryor, have signaled they may not vote for the bill.  What makes these three central to the EFCA battle?  Because Bentonville, Arkansas is home to the largest and most outspoken, anti-union corporation in the world – Wal-Mart, and they really don’t want to vote against Wal-Mart.

Like those from Arkansas, other Democrats are leery about EFCA harming their chances of reelection in 2010.  In fact, nearly 20% of the first-time Representatives did not co-sign the bill and they come from the most competitive districts in the country.  Specifically, Reps. Bobby Bright (D-Ala), Walt Minnick (D-Idaho), and Parker Griffith (D-Ala) all won with less than 52% of the vote .  Reps Frank Kratovil (D-Md) and Tom Perriello (D-Va) each required a recount to claim their seats.  Only Reps. Glenn Nye (D-Va) and Ann Kirkpatrick (D-Ariz) won by comfortable margins.  All but Perriello took over $100,000 in campaign money from labor unions, and Perriello took $77,000. 

Despite these statistics and the outspoken Blue Dog opponents of EFCA, the House had 223 co-sponsors of the bill, which basically indicates that it will once again sail through the House.  However, Democrats in the House enjoy a 38-vote margin of error for getting legislation passed.  The Blue Dogs have 47 members.  So, if the Dogs stick together, they can block any legislation they want to, including EFCA.  But why would they want to block EFCA?  Because corporations hate EFCA and corporations have deep pockets.  And just like Obama is rewarding the unions for spending $500 million on getting elected President, a lot of rich corporations will reward those who help defeat EFCA – even moderate Democrats.

So we turn our attention to the Senate.  The Senate bill had 40 sponsors – all Democrats (this includes Lieberman and Sanders, both registered Independents).  60 Senators in favor of EFCA is needed for a cloture vote – which defeats a Republican filibuster.  18 Democrats did not sponsor the bill, including Lincoln and Pryor from Arkansas who are trying to be wolves in sheeps clothing for WalMart. 

Here’s the most recent theory on breaking down how the Senators will vote.  The 40 sponsors will obviously vote in favor of the bill.  The following Senators are considered locks for voting in favor of EFCA:  Feinstein (D-CA), Bennet (D-CO), Udall (D-CO), McCaskill (D-MO), Baucus (D-MT), Tester (D-MT), Bingaman (D-NM), Hagan (D-NC), Conrad (D-ND), Dorgan (D-ND), Waner (D-VA), Webb (D-VA), and Kohl (D-WI) = 53 lean votes for EFCA.  Best case scenario for the EFCA supporters is that Lincoln, Pryor, Bayh (D-IN), Landrieu (D-LA), and Nelson (D-NE) – all of whom voted in favor of EFCA in 2007 – must do so again.  But to make sure they have the magic 60 votes, Arlen Spector (R-PA) who voted in favor of it before needs to vote in favor of it again, and Al Franken (D-MN) needs to be crowned champion of Minnesota’s Senate seat and vote in favor of EFCA.

Let’s not forget that in late February, the Secret Ballot Protection Actwas introduced in an effort to preempt the introduction of EFCA.  The SBPA was introduced in both the House and Senate by both House and Senate Republicans, and would make it an unfair labor practice under the National Labor Relations Act for an employer to recognize a union that has not been selected via secret ballot.  Additionally, it would be unlawful for a union that has not been chosen by the employees’ exclusive representative in a secret ballot election conducted by the National Labor Relations Board to cause or attempt to cause an employer to recognize or bargain with it.

So here’s my conventional wisdom: Unions and Democratic Congressmen were enjoying all the attention given to the economy, which helped make their case that employees need better wages and job security now more then ever – despite how illogical that argument really is.  The media has not picked up on covering the Employee Free Choice Act, yet.  In fact, most people (including business owners, management, and employees) don’t know what EFCA is and how it can change their lives literally overnight.  And the more covert Congress can keep EFCA, the better for its chances of passing.  However, Democratic Congressional opponents of EFCA, including the Blue Dogs, were becoming increasingly vocal about the negative effects of EFCA, and it was only a matter of time until the media began discussing it, and once the general populace became educated about EFCA, it’s allure would quickly fade. 

But the straw that broke the camel’s back was the introduction of the Secret Ballot Protection Act.  The SBPA thrust card check and the removal of the secret ballot in union elections to the forefront and the media would inevitably begin covering  the nuances of the Employee Free Choice Act.  Rather than have a one-sided debate about the SBPA, the EFCA proponents had no choice but to introduce their bill at this time, and of course, introduce it in both the House and Senate on the heels of the SBPA being introduced in both the House and the Senate a few weeks ago.

EFCA Update February 21-27

The Charlotte Business Journal exposed EFCA with a focus on the construction industrywhere, “the overwhelming majority of companies are small businesses with fewer than 100 employees.  The prospect of having the government dictate labor agreements would certainly discourage many would-be employers from ever starting up their own operations.  Such a chilling effect on start-ups could lead to the consolidation of the construction industry into a handful of large companies with the resources necessary to cope with government-directed labor agreements.”  Specifically, 20,000 construction (8%) workers lost their jobs in North Carolina – a right to work state with one of the lowest levels of unionized workforce in the country – since May 2008.

Andy Stern, President of SEIU, challenged the Chamber of Commerce to debate him on the Employee Free Choice Act.  The Center for Union Facts already challenged Americans Right to Work (a union-front organization) to a debate on EFCA awhile ago.  In fact, LaborPains.org even sent Stern a formal invitation to debate, but Stern, as expected, has not responded.

From the HR Daily Adviser:  “As an employer who has written about and practiced HR for the last 30 years, and as someone whose company started out with me as its sole employee, and now employs 150 people (plus at least that number of freelances, contract employees, and suppliers), I know that BLR as we know it wouldn’t have happened if we’d been unionized.  Fast, innovative growth in a complicated changing environment requires a lot of flexibility, and while unions have a lot to be said for them, flexibility isn’t one of their virtues.”  The article continues, “HR’s job must be to communicate with employees. . .  We have to do it NOW and not wait until a union is poking about the workplace, when changes can be seen as unfair labor practices.  A start in this process should be conducting an employee attitude survey.”  This advice is the same that I gave months ago.

International Brotherhood of Electrical Workers (IBEW) union president J.J. Barry warned about “changing the system solely because of an effort stemming from the isolated complaints of a few [union employees'” when speaking to IBEW employees who wanted to unionize.  Mr. Barry continued, “The selection of a bargaining representative is likely to change the nature of the employer/employee relationship, by making it more formal and structured, and diminishing the present system of direct resolution of issues between Representatives and their Vice Presidents, Department Directors, etc.”  Click here to read the entire memo from Mr. Barry.

The AFL-CIO and Change to Win filed a complaint against the Center for Union Factsand the Marcus Foundation alleging that Richard Berman and Bernie Marcus (co-founder of Home Depot) took part in a call organized by Bank of Americato get corporate donors to fight against EFCA and this type of solicitation violates the tax status of the Center and the Foundation which requires that the Center and the Foundation not take part in political campaigns.  This lawsuit has really flown under the radar, but I’ll keep you updated should anything develop.

EFCA will cost blacks their jobs says the Black Chamber of Commerce.

“Union ranks are shrinking not because people are leaving them but because jobs are disappearing.  Most outdated union models cannot compete in the global environment in which we live.  They work where the market is captive and consumers have not been able to freely explore the best value” are words from a western Pennsylvania editorial.  Furthering this thought, unions are now openly targeting banks, restaurants, grocery stores, and health care institutions like never before since those jobs cannot be relocated.

For all of the unions who are now saying that EFCA will not eliminate secret ballot elections, the actual words of EFCA prohibits the NLRB from directing an election if the union turns in cards signed by the majority of employees.  Therefore, under EFCA, the only way to obtain a secret ballot election is if a union turns in cards from more than 30% of the employees but less than 50%.  All unions internally require at least 60% of the employees to sign cards before letting the NLRB know that there is an organizing drive going on – and some unions require at last 80% – because the unions know that once they request an election, the employers get to counter the propaganda the unions conveyed to the employees to sign the cards in the first place.  Once that propaganda is countered, inevitably, union support dwindles.

Obama and his advisers insist that they place national economic recovery over every other policy objective.  However, according to Mallory Factor on National Review Online, when it comes to labor policy, [Obama] supports measures that economic history indicates would significantly hinder such recovery.  “Experience shows the link between increased unionization and reduced job and income growth.  The ten states with the highest rates of private-sector union membership in 1997 had two-thirds less aggregate private-sector job growth by 2007 than did the ten states with the lowest rates.  The ten most unionized states had only half as much real personal income growth as the ten least.”

Adrienne Eaton, a professor at Rutgers University’s School of Management and Labor Relations has studied the effect of card check laws in Canada and elsewhere.  She’s not sure if millions and millions of workers are going to unionize in the next few years, but did say that even though Obama has already issued several executive orders overturning Bush-era policies, and health care reform is a top priority, EFCA is far and away the most important union issue because of its potential impact on the way unions do business.